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— by Richard Nemec
Once a facility has undergone extensive lighting and HVAC retrofits, bottom-line-oriented facility
executives want the answer to one question: What’s next? Facility executives concerned about
expensive energy bills are among the first to replace outdated lighting systems with energy
efficient T-8 lamps and electronic ballasts. They also are most likely to make changes to control
systems to optimize HVAC performance. But when all that is done and the relatively short two-to-
four-year payback has been realized, many facility executives sit idle, operating under the false
notion that they’ve finished retrofitting their facilities to operate efficiently.
Truth is, they’ve only just begun.
Opportunities to improve a facility’s energy efficiency are present in every electro-mechanical
and controls device located on the property. Some places to start looking for additional savings
include variable-speed motors, control networks, windows and the building envelope, and circuits
and underground cabling. And that’s not to mention all of the improvements to be made through work
process changes — such as innovative work, production and occupancy schedules — and strategic
energy buying, billing and metering refinements.
Robert Dickerman, chief executive officer of San Diego-based Sempra Energy Solutions, says
improving efficiency involves taking a hard look at a number of things, including commodity
supply, generation equipment and the way an organization wants to structure how it provides
products and services related to energy.
“With the complexity and inter-relatedness of the energy business today, a facility executive has
the opportunity to do much more than just replace lamps and ballasts and upgrade HVAC equipment,”
he says.
A challenge, however, is the lack of cookie-cutter assessments or solutions, even for national,
multi-state commercial building operators who enjoy various operating efficiencies from a
portfolio of standardized facilities. Different states and regions geographically present varying
opportunities and challenges because energy-related political, economic and technological changes
remain in flux. Further, they mean different things depending on what types of business processes
are applied in a given commercial or industrial space.
An array of refrigeration equipment and vending machines running on 24-by-7 schedules, sucking up
electricity, may be an opportunity for real cost savings in one state and too small to worry about
in another. Similarly, technology and market development of energy-saving items may or may not be
viable options depending on their position in the new-product-adoption curve.
Experts in both the public and private sectors, however, maintain that the mind-boggling array of
variables should provide encouragement for facility executives to look for added energy efficiency
options.
Without running the consultants’ meter, an executive who uses its organization’s Internet-based
information sources can make first-tier judgments about the cost-saving possibilities their
particular properties might have buried beneath the surface of various operating spreadsheets.
Equipment manufacturers, software developers and implementers can be useful sources of information
when they understand a given business.
“The payback varies with each industry,” says Mukesh Khattar, an energy-efficiency researcher
with the Electric Power Research Institute, Palo Alto, Calif. “What is acceptable to an owner-
occupied building is not acceptable to a speculative building owner. The biggest challenge today
is the education of consulting engineers. Some of them are churning out the buildings so fast that
they are not updating their knowledge on technological advances that could help build more energy
efficiency into buildings.”
Parts of the federal Department of Energy (DOE) and its Energy Star® Building Program are
specifically aimed at commercial facility operators. They stress a lot of generic points and list
varying national sources of information and assistance. Most of the advice is common sense:
When identified, prioritize potential measures and resources on the basis of lowest cost and
quickest payback, or largest energy savings. Also consider potential impacts on building occupants
and their daily operations, along with the amount and depth of staff commitments required.
Before any action is taken or dollars are spent, create a plan to collect data, measure and
evaluate it on each energy efficiency measure contemplated. A document for doing just that is
available from a third-party source, the International Performance Measurement and Verification
Protocol, a tool to help assess the results of energy efficiency improvements.
“There are good reasons why lighting and HVAC traditionally are the low-hanging fruit — because
they are easy and they are obvious,” says Jeff Jacobs, a senior vice president with San Francisco-
based Chevron Energy Services, a branch of the international energy giant. “But they only cover
about 20 percent of the true opportunity. You must go below the surface and know the right
questions to ask to come up with solutions to address the other 80 percent of the needs.”
Another place to look for added savings may be in areas that are only tangentially related to a
facility’s energy systems. Business processes and equipment, power quality and on-site connections
to utility grids are all places where efficiencies and cost-savings can be identified and
eventually exploited.
In Texas, the University of Houston main campus followed up normal lighting and HVAC upgrades by
installing a new 138-kilovolt substation. The substation connects the electrical loads of 56
buildings, pushing the university into a lower rate category that provides more than $600,000 in
annual savings on a $4.2 million investment, according to Ray Ehmer, a vice president with Houston-
based Reliant Energy Solutions. The $14.3 million performance-based contract that Reliant signed
with the university is producing $2 million in savings annually.
Business processes and equipment are other areas to divert some attention. In the case of an
industrial plastics manufacturer, cutting accelerating power outages allowed the firm to reduce
the cost of down time and spoiled material. By addressing the plants power quality, production
losses related to energy were cut to less than .06 percent from well above 1 percent, translating
into significant dollar savings.
“Our biggest concern was time, and then (an energy services company) came in and took care of that
problem,” says the facilities manager at a 140,000-square-foot industrial facility in Canada that
belongs to Textron Systems. The company spent $289,000 to turn up $84,000 of annual savings on its
energy and processing costs. “They handled all aspects of the project without interrupting our
staff’s schedule or impacting our productivity. In addition, we were able to improve our facility
and equipment, while reducing utility expenses.”
There wasn’t a lot of lighting or HVAC work. The savings came through a combination of commodity
energy purchasing, motor upgrades, process changes and other peripheral items. These types of
savings are usually found by companies that take initiative and provide in-house staff or outside
consultants the freedom to do things that made sense, as opposed to things everyone would like to
do, says Ed Liston, chief executive officer of EUA Cogenex Corp., Lowell, Mass. Facility
executives who do it this way are open to more nontraditional options. Sometimes the larger
benefits can come from relatively small process applications.
While the professionals have suites of products and the like to offer a full range of services,
the individual facility executive for one or a portfolio of facilities needs to determine how to
approach energy and business process systems. Generally, the older the facility and more energy-
intensive its business processes, the shorter the payback period. The newer and less energy-
intensive, the longer the payback. Two types of savings present themselves — ones that meet a
facility owner’s financial criteria and those that improve the flow or quality of the business.
“A lot of it depends on the economic parameters under which the operators are operating,” says
Chevron’s Jacobs. “In the hospitality business, operators may be turning over properties quite a
bit, and in that instance they are looking at first-cost installed. They aren’t interested in
economic or operational life cycles.
“In contrast, there are owners and operators who hold on to their properties for a long time. Life-
cycle analyses may make a lot more sense for them. This is where the information from the owners
is critical.”
Although facilities executives rarely will describe it as such, “smart” buildings are the
ultimate vision when a search is launched for energy and related efficiencies. If the facility and
business processes are a large part of the business costs, outside help is usually recommended to
save time and get focused on the real potential nuggets.
The search, however, is only worthwhile when it is done comprehensively. Facility executives must
make sure there is a commitment of time and resources before undertaking the longer-term, perhaps
harder to find savings.
Richard Nemec is a Los Angeles-based writer who covers energy.
Energy Decisions Online
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